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Metropolitan Park opened earlier this year in downtown Grand Rapids, and city officials welcomed the low-income housing development. Not just because the project resulted in 24 new, stylish rental apartments in a contemporary-looking building at 350 Ionia Ave. SW, but also because Midland-based Brookstone Capital LLC built the project.

Brookstone Capital is a newcomer to the city’s affordable-housing market, which has seen only four builders that regularly construct low-income units in Kent County; and all are nonprofits.

Those four by themselves simply can’t possibly meet Mayor George Heartwell’s goal of having 500 new affordable housing units built countywide each year through 2014 to provide homes for the estimated 8,000 who are without one.

And the mayor is very aware of that.

Heartwell also knows that for-profit builders wouldn’t be in business very long if they built residences for those who can’t make a mortgage payment or write a rental check on their own.

“The truth is I don’t expect for-profit builders to do something that is against their economic interest. When we’ve been most successful in this country in providing housing for low- and moderate-income people, we’ve done it with significant federal and/or state investment in the form of subsidies,” he said.

Heartwell was in the mortgage banking business for 15 years starting in the 1970s, and he remembers the Department of Housing and Urban Development programs that subsidized single-family and multiple-dwelling units back then, if the units were income qualified.

“With the cuts that began with (President Ronald) Reagan and through every single administration since — the Republicans and Democrats — HUD has been diminished. So today, the builder who has a social conscience and would like to build affordable units simply can’t afford to do so,” he said.

Heartwell also said the city can’t absorb all the housing units needed each year by itself, as there aren’t enough vacant parcels available in Grand Rapids.

“I don’t think the city should be the only place we automatically think of building housing for low-income people,” he said. “We simply have to find a way to build affordable housing throughout the county to give people a choice in where they live, and as well to spread the burden and expense of low-income people among some of our more affluent neighbors.”

Sharing the burden with the suburbs leads low-income workers into a mixed-income environment, which gives them a chance for some upward mobility. The Globe Apartments at 315 Commerce Ave. SW has been designed for that mix. It also lessens the social problems a community can face when the poor are strictly confined to certain locations.

But land prices are often higher in a suburban tract than in a core city and that makes affordable units even more unaffordable to build. Plus, zoning ordinances in many of these locales call for large lots and big houses, and some don’t allow for multi-family dwellings.

“The likelihood of getting some affordable housing on that lot is next to nothing without getting some governmental support or subsidy,” said Heartwell.

“That’s why we’re not seeing much affordable housing being built in the ’burbs.”

One potential answer to this situation would be for Kent County to adopt a countywide housing policy like Montgomery County, Md., did more than two decades ago. That county board passed an ordinance requiring every new development with 50 or more units to have at least 20 percent deemed affordable. Then the county helped subsidize a portion of those residences.

But despite what seems like an unwinnable challenge, Dwelling Place Inc., the Inner City Christian Federation, Habitat for Humanity and the Genesis Non-Profit Housing Corp. still build affordable residences in the city. They have to be very inventive, though, in order to come up with financing for their projects.

“They are creative geniuses,” said Heartwell.

The city helps with community development block grants from the federal government, but those are being cut. The city also sells parcels to them to build on for as low as a dollar. The Michigan State Housing Development Authority assists with the financing of a project, which clearly helps, but sometimes it isn’t enough to cover an entire project.

Some commercial lenders, like National City Bank, have development organizations that participate in building low-income housing, but they can’t do it all. Others will purchase the tax credits that a nonprofit developer can earn on a project, but the bulk of the financing often has to be in place before that transaction can be completed.

Brookstone Capital used a Cool Cities grant from the state and MSHDA financing to build Metropolitan Park.

So under current conditions, building new, affordable housing is a hit-or-miss scenario at best. And Heartwell said the situation isn’t likely to improve very much until the federal government gets prodded into being more active in the affordable market. Only when that happens will his goal of 500 new housing units a year become more attainable.

“I can only get optimistic about achieving this goal if I believe that, collectively, we can influence the federal government to be aggressive in promoting and subsidizing affordable housing. It can’t happen without federal support, no matter how generous this community is — and it is enormously generous. But it can’t do it without that big piece of federal money,” he said.

“I think there is some renewed optimism that this new Congress is going to be more inclined toward providing affordable-housing options.” CQ

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